Nuvei falls after Spruce Point refreshes short thesis after stock rally

Spruce Point Capital Management issued a "Strong Sell" opinion on shares of Nuvei in a new short report, saying the shares have up to 50% downside risk. In a report released December 8, 2021, Spruce Point previously outlined it concerns about Nuvei’s "biographical misrepresentations, dubious acquisitions, exposure to high-risk and ESG-unfriendly industries and its high likelihood of failing to meet aggressive financial expectations." With the shares up 67% year-to-date, the firm sees "false hope that the worst is behind it." Spruce Point says Nuvei obscured the extent of its digital and crypto exposure and had an FTX partnership. In addition, the company’s "levered acquisition of Paya Holdings appears troubled from numerous angles," the firm writes in a report posted on its website. Spruce thinks Paya did not clearly disclose its organic growth by detailing contributions from acquisitions and the effects of inflation. "Nuvei’s financial disclosures are weak, and we believe results are being temporarily enhanced from concentrated exposure to high risk gaming and eCommerce," Spruce Point writes. Shares of Nuvei are down 7.5% to $39.25 following the short report. Reference Link